The Croatian real estate market is experiencing a paradoxical trend as the sale of new apartments has dropped significantly, yet prices continue to rise, particularly in the cities of Split and Zagreb. Data indicates that the number of new apartments sold in Croatia has decreased by over 22% compared to the previous year. Despite this drop in sales, the average price per square meter of new construction in Zagreb has climbed to €3,518, marking an increase of approximately €560 from the previous year. In Split, the situation is even more pronounced, with prices for new apartments starting at €5,000 per square meter, and luxury apartments in certain areas reaching over €10,000 per square meter.
The rise in housing prices is largely attributed to increased construction costs and a limited supply of available properties. According to Filip Ćulibrk, director of a Zagreb real estate agency, the overall cost of construction has surged, which in turn has driven up property prices. “Everything has become more expensive, including real estate prices. The main factor influencing this is the rise in construction costs and all other associated expenses,” Ćulibrk told RTL Direkt.
In Zagreb, the average price for new construction has risen by nearly 19% over the past year. However, these average values do not always reflect the actual market prices for individual properties. For instance, a property in Zagreb’s Bijenik neighborhood sold for €4,000 per square meter, while some apartments in the city center have reached prices as high as €10,000 per square meter. In Split, real estate agents report that prices continue to rise, with new constructions starting at €5,000 per square meter and luxury apartments in southern parts of the city, such as Meje, Bačvice, Zenta, and Žnjan, exceeding €10,000 per square meter. Andrea Alujević, assistant director at a real estate agency, highlighted that these high prices are partly due to the limited availability of new apartments in Split, which lacks space for expansion.
The decline in the number of new apartments sold is notable, with only 1,618 units sold in the first half of this year compared to 2,086 in the same period last year, representing a 22.4% decrease. The market is particularly lacking in smaller apartments, which are more affordable for young families. Ćulibrk noted that there is a high demand for small apartments with multiple rooms, such as two-bedroom apartments up to 40 square meters with a separate bedroom or three-bedroom apartments between 55 and 60 square meters with two bedrooms.
Croatia is among the countries in the European Union experiencing significant increases in real estate prices. Eurostat data shows that in the first quarter of the year, Croatia recorded one of the highest property price increases in the EU, with a 14.3% rise, following Portugal and Slovakia. Experts warn that the situation is unlikely to change significantly until the supply of new and second-hand properties increases. Dubravko Ranilović, president of the Real Estate Business Association at the Croatian Chamber of Commerce, stated, “Demand is still greater than supply. It is not just due to the need for housing; unfortunately, residential real estate, especially new construction, has become an investment object.”
A significant issue in the Croatian market is the large number of vacant properties and apartments purchased as investments rather than for living. Many properties that could be available for long-term rental are instead used for tourist rentals, further exacerbating the supply-demand imbalance. Ranilović emphasized that until more vacant properties are activated and the supply increases, prices will continue to rise. This situation poses a challenge for many young families, for whom purchasing their own home remains increasingly unattainable.
